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The gold futures contract traded on the Multi Commodity Exchange (MCX) has lost its momentum in the past week. The contract has reversed lower due to the strong dollar which has pulled down the global spot gold price. The contract fell 1.3 per cent in the past week. It is currently trading at ₹26,860 per 10 gm. Immediate support is at ₹26,865 – the 21-day moving average. A break below it can take the contract lower to ₹26,500 and ₹26,400 in the coming days.
Short-term traders can go short at this juncture. Stop-loss can be kept at ₹27,100 for the target of ₹26,500. Intermediate bounce to ₹27,000 can be used to accumulate short position.
On the other hand, if the contract manages to bounce from the 21-day moving average, a test of ₹27,000 is possible. An immediate break above ₹27,000 looks less likely as a strong short-term trend line resistance is poised at this level.
On the global front, the spot gold price ($1,166/ounce) has strong resistance in the $1,175-1,180 zone. Short-term outlook is bearish while it trades below this resistance zone. A fall to $1,150 looks likely in the coming days. Further break below $1,150 can drag the yellow metal lower to $1,140 thereafter. Weak global gold price can continue to keep the domestic MCX-gold futures contract under pressure.
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